Adv. Magedi-Titus Thokwane

• Senior Manager, Regional

Settlement Services, NPSD, South

African Reserve Bank

• SADC Payment System Subcommittee Project Manager

Photo © SARB

SADC Payment System integration project

Developments in the regional payments

November 2019

Adv. Magedi-Titus ThokwaneSouth African Reserve bank

Topics to be covered1. The Southern Development Community (SADC)2. SADC Institutional Arrangements3. SADC Payment System Subcommittee4. SADC Payment System Project : Modernisation5. SADC Payment System Project : Member states stocktake6. SADC-RTGS: Strategic initiatives, legal framework,

governance arrangements and business model7. SADC Payment System Initiatives : Fintech, Intracontinental

and future8. SADC-RTGS in numbers

1. Southern African Development Community

Co-operate on matters

pertaining to finance and investments

within the region.

16 member countries, including Comoros

which recently joined

Sub-Committees includes

SADC Summit (Head of States)

SADC Council of Ministers

SADC Committee of Ministers responsible for Finance and

Investment

Committee of Central Bank Governors (CCBG)

Banking Supervision

Financial Markets

Payment System

SADC Banking

Association

2. SADC Institutional Arrangements

CCBG Secretariat

3. SADC Payment System Subcommittee Sub-committee of the CCBG

– Mandate is drawn from SADC Protocol on

Finance and Investment (FIP)

Oversees the implementation of the Annexure 6

of the FIP

– Co-operation on Payment Systems, Clearing

and Settlement Systems

Annexure 6 of the FIP aims at:

– Implementation of safe and efficient

payment system in each Member State

– Development of cross border payment

strategy for the region

Each Member State Central Bank appoints one

person to serve on the Sub-committee

Informed the Vision of the

SADC Payments Project

4. SADC Payment System Project: Modernisation of Payment Systems

5. Modernisation : Member State Stocktake

811/21/2019

Develop Domestic Vision and Strategy documents

Promulgate of National Payment System acts

Establish of National payment system departments or divisions within the respective SADC central banks

Developed and implemented of domestic (RTGS)

Developed domestic oversight functions and frameworks

Domestic RTGS interlinked with Central Securities depositories to achieve delivery versus payment (DvP)

Implemented of domestic Retail Payment infrastructures for different payment streams/schemes

Introduced and enhanced mobile payment and mobile banking initiatives to support financial inclusion

Modernisation: RTGS

Implementation

Comoros excluded.

14

1

Modernised

Plans to modernise

Alternative settlement arrangements

6. SADC Payment System Integration: Strategic Objectives

Strategic objective 1: Enhance (harmonise) the regional legal and regulatory frameworks to facilitate regional clearing and settlement arrangements

Strategic objective 2:Implement an integrated regional cross-border payment settlement infrastructure (business, technical and system)

Strategic objective 3:Implement an integrated regional cross-border payment and post-trade clearing infrastructure

Strategic objective 4: Establish a co-operative oversight arrangement based on the harmonised regulatory framework for regional cross-border payment and settlement among participating member countries

11/21/2019 9

6. SADC-RTGS Legal Framework : Contractual arrangements

SARB (SADC-RTGS

System Operator)

SADC Central Banks

SADC-RTGSParticipants

Appointment of the SARB

as SADC-RTGS System

OperatorStakeholders Agreement

SADC-RTGS

Participant Settlement Agreement.

SADC-RTGSService

Agreement.

11/21/2019 10

SADC PSOC

SADC PSMB

Payment Scheme Rule Book

SADC-RTGS

DVP

RCSO

SLA’s & other operating

agreements

Payment Scheme

• Ensure compliance with CPMI IOSCO standards e.g. PFMIs

• Oversee SADC-RTGS & RCSO and functions as:

• Access Criteria• Disputes• Finality

IMMS LVT

11

6. SADC-RTGS Governance Arrangements

FNB ABSA

ACH

NFNB Bank W/hoek

NACH

South Africa Namibia

Regional Clearing Operator

SADC RTGS

6. SADC Payment System Integration Business Model

11/21/2019 12

BoC

7. SADC Fintech Workgroup

The purpose of the WG is to collectively develop SADC central banks’ policypositions on financial technology (fintech) developments including crypto-assets as they relate to their respective mandates:

Responsibilities of the WG includes : (a) Advise the CCBG on fintech developments including crypto-assets as

they relate to central bank mandates;

(b)Recommend on prioritised programmes / projects, programme / project objectives, scope of work etc.;

(c)Implement programmes / projects as approved by the CCBG;

(d)Liaise with external service providers and relevant stakeholders; and

(e)Perform any other related or relevant activities as shall be necessary to achieve the objectives and purpose of the Workgroup.

7. Strategic initiative: Intracontinental Payment Systems integration

• Action :– Facilitate public-private sector engagements on

payment system regional integration issues.• Progress:

– Under the auspices on the Association of AfricanCentral Banks executing the integration on the mobilepayments and regional payment systems in theAfrican continent

– Engage SADC Banking Association, African MobileNetwork operators (MNOs), Non-banks, FMIs, andCentral Banks as regulators to execute the project.

Summary of SADC Payment system integration initiatives • Completed

– Settlement infrastructure – SADC-RTGS– Business models – SADCBA Beige Book – Regional clearing and settlement operator – appointed– High value payment scheme – operational– Oversight functions established– RTGS modernisation (first generation) or settlement arrangements– NPS Departments/Units/Division established

• In progress– SADC Transactions clearing on immediate basis (TCIB) incl. participation of non-banks

(faster payments scheme)– CMA low value cross border electronic debit (batched transactions scheme)– Fintech workgroup– Policy and supervision – NPS system incl. RTGS modernisation (ZA Project Future, RTGS Replacement)

• Future planned– Card scheme– DVP– SADC EFT scheme

8. SADC-RTGS indicators infographic Participation Totals since inception And Peaks

Number of participating banks per country Volume/Value distribution by instruction type

3 70% Customer payments

18% Interbank payments

12% System generated

ZAR 5.59 tnInterbank Payments

ZAR 620 bnCustomer Payments

2 780 30 April 2018

Peak Daily Volume

11.4 billion 28 December 2018

Peak Daily Value

32 059 October 2018

Peak Monthly volume

119.53 billionAugust 2017

Peak Monthly Value

Participating countries

Total SADC-RTGS Participants83

75

14 1 528 540Total Volume

ZAR 6.13 Trillion(USD 402bn/EUR 364bn)

Total ValueCommercial

BanksRCS

OperatorsCentral Banks

7 1

21

5

9

64

51

611

5 914

TBC

8. Main Indicators (Sept18-Aug19)Number of instructions

Value of Instructions ZAR(TN)

Average Value (Interbank)ZAR (ml)

343 307(Last: 343 805)

1,246(Last: 1,269)

18,147

ZA41%SZ

17%

NA13%

BW13%

LS11% Others

5%

Country distribution customer payments (Value)

ZA27%

BW24%

LS19%

SZ15%

ZM7%

MW5%

Others3%

Country distribution customer payments (Volume)

Processing per hourGrowth in volumes

0

10000

20000

30000

40000

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Current

Average Value (Interbank)ZAR (ml)

625,413.74

0

20000

40000

60000

80000

00:00 02:00 04:00 06:00 08:00 10:00 12:00 14:00 16:00 18:00

Current

THE END